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Lyft Drives Upbeat Q1 Results; Website Visits Hinted at it

Beyond the pandemic, ride-hailing services have experienced momentum with an uptick in demand. Now that the fears of Omicron have subsided, individuals are moving freely again, which has provided a boost to the growth prospects of service providers. 

This, in turn, indicates that these companies might report strong earnings results in the first quarter as low ride volumes in January is likely to have been offset by a rebound in demand in February and March. 

Lyft, Inc. (NASDAQ: LYFT) is one such ride-hailing business that reported upbeat results in the first quarter of 2022, exceeding both earnings and revenue estimates. Elevated demand and resilient driver levels acted as tailwinds. 

However, shares of one of the largest transportation networks in the United States and Canada lost almost 26% in the extended trading session on Tuesday. Despite the beat, the company’s discussions during the call related to rising investments in drivers and marketing for the second quarter raised investor concerns. 

Results in Detail 

Lyft recorded adjusted earnings of $0.07 per share in Q1, compared with the Street’s estimated loss of $0.07 per share. The company reported an adjusted loss of $0.35 per share in the same quarter last year. 

Including certain adjustments, the net loss was $196.9 million or $0.57 per share, down from the loss of $427.3 million or $1.31 per share in the prior-year quarter. 

Total revenues generated during the quarter surged 44% year-over-year and stood at $875.6 million, beating the consensus estimate of $846 million. Results were driven by rideshare ride volumes, which reached a new COVID high in the quarter on the back of high demand. 

The Contribution margin came in at 57.4% in the quarter, up 200 basis points year-over-year and surpassing the company’s guidance of 56.5%. Furthermore, adjusted EBITDA stood at $54.8 million, compared with the negative $73 million recorded in the same quarter last year. 

As of March 31, 2022, the number of active riders came in at 17,804, up 31.9% year-over-year, while revenue per active rider grew 9% to $49.18. 

CFO’s Comments 

Looking forward, Lyft’s CFO Elaine Paul said, “We will continue improving service levels to benefit our business in the near-term and put us in the best position to support increasing demand over the long-term. We also expect to strategically invest in key business initiatives to support our continued growth.” 

For Q2 2022, management expects revenue to land between $950 million and $1 billion, representing sequential growth of 9% to 14%. Additionally, the contribution margin is likely to be 56%, while adjusted EBITDA to range between $10 million and $20 million. 

Wall Street’s Take 

Following Q1 results, Wedbush analyst Ygal Arounian maintained a Buy rating on Lyft and decreased the price target to $32 (4.03% upside potential) from $50. 

Arounian stated, “Painful expense guidance causes us to lower our price target from $50 to $32, but maintain our positive stance and we would be buyers on this overreaction aftermarket.” 

“While the biggest near-term focus is on getting service levels back to where the company wants to be, there are a number of mid to long-term investments as well,” the analyst added. 

The rest of the Street is cautiously optimistic about the stock, with a Moderate Buy consensus rating based on 16 Buys and eight Holds. The average Lyft price target of $55.38 implies 80.04% upside potential. Shares have lost 45.26% over the past year. 

Website Traffic   

TipRanks’ Website Traffic Tool, which uses data from SEMrush Holdings (SEMR), offered insight into Lyft’s performance in the first quarter. 

According to the tool, the Lyft website recorded a 33.39% sequential increase and a 113.05% year-over-year rise in global estimated visits in Q1 2022. 

The predictions that were based on TipRanks’ website visits data turned out to be correct, with Lyft reporting strong revenues, driven by a surge in the number of active riders.

Bottom-Line 

With increasing competition, macroeconomic factors, upbeat results, recent price performance, and the company’s strategic initiatives in consideration, investors might consider a stake in Lyft for potential long-term gains. Also, vigilance on website trends reflected on TipRanks’ Website Traffic Tool could be a guiding factor for prudent investment decisions. 

Learn more about the Website Traffic tool in this video by Youtube sensation Tom Nash. 

Discover new investment ideas with data you can trust 

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